BHP scales new production heights despite COVID-19

BHP's Western Australia Iron Ore operations Image: BHP

BHP has overcome COVID-19 to achieve record production at its Western Australian iron ore operations, as well as at the Caval Ridge and Poitrel coal mines in Queensland.

The mining giant produced more than 248 million tonnes of iron ore during the 2020 financial year, thanks to record production at the Jimblebar and Yandi mines in Western Australia.

A series of maintenance programs over the past four years enabled Western Australia Iron Ore (WAIO) to also produce at a record annualised run rate above 300 million tonnes during the June quarter.

BHP also had over 900 employees and contractors in business-critical roles temporarily relocate from interstate to Western Australia in order to overcome border restrictions.

BHP noted that its South Flank iron ore project in Western Australia is 76 per cent complete and on track for first production in mid-2021.

The company’s positive achievements also extended to Queensland Coal, where it mined record underground coal at the Broadmeadow mine and reached record annual production at Caval Ridge and Poitrel.

Metallurgical coal production hit the 41 million tonnes mark in financial year 2020, which was 3 per cent higher than in the last financial year.

Energy coal production reached 23 million tonnes, 16 per cent higher than in the previous year, thanks to higher production at New South Wales Energy Coal (NSWEC).

BHP expects to achieve full year unit cost guidance at WAIO, Queensland Coal and NSWEC.

“This performance, achieved in the face of COVID-19 and other challenges, is a result of the outstanding effort of our people and the support of our communities, governments, customers and suppliers,” BHP chief executive Mike Henry said.

BHP Mitsubishi Alliance (BMA) produced over 4.3 million tonnes at Caval Ridge, and BHP Mitsui Coal produced over 4.1 million tonnes at Poitrel on a year to date basis through June.

This was achieved despite planned major wash plant shutdowns in the first half of the year and significantly higher rainfall from January through to February.

BHP’s largest coal mine in Queensland, Blackwater, was the most severely impacted, with the mine expected to operate below full capacity until the end of the September quarter.

In the copper portfolio, BHP’s production for the 2020 financial year fell broadly in line with the prior year.

It production at the Olympic Dam mine in South Australia jumped 7 per cent on the prior corresponding period, reaching 172,000 tonnes thanks to solid underground mine performance and record grade.

This is expected to further increase to between 180,000 and 205,000 tonnes in the 2021 financial year.

“Our diversified portfolio and high quality assets, together with our strong balance sheet, make us resilient to the ongoing uncertainty in the markets for our commodities,” Henry concluded.

“…We remain confident in the outlook for demand for our products over the medium to long-term.”

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